QualityInspection.org

Quality Assurance, Product Development, and Purchasing Strategies in China

  • Home
  • Articles
    • How To Manufacture A Product In China (without losing your shirt)? [Importer’s Guide]
  • Best Of
  • About Us
  • Contact us
X

Don't miss a post

It's easy to subscribe to our newsletter where you'll receive weekly updates for professional importers and manufacturers on better understanding, controlling, and improving manufacturing & supply chain in China, India, Vietnam, and beyond.

You are here: Home / China Quality / Maturity of Manufacturing Areas in China

Maturity of Manufacturing Areas in China

October 13, 2014 by Renaud Anjoran

I noticed that inexperienced importers tend to look at obvious signals (prices, response times, quality of English…) when communicating with potential suppliers. But they often overlook the location of the factory.

The export manufacturing industry really emerged in China in the early 1980s in Shenzhen. For example, most office buildings that are in the Huaqiangbei area used to house manufacturing operations. Then the exporting factories went to Dongguan city, to the rest of Guangdong, to Zhejiang and Fujian… and so on.

What is pushing new factories further and further away? Labor availability and cost, as well as other factors.

The dynamic goes like this: as costs rise, many importers need to go to less mature areas. note that this strategy is more difficult in industries:

  • With final processing/assembly concentrated in one cluster
  • With raw material / components concentrated in one cluster
  • Dependent on particular engineering and production skills

Let’s look at the lingerie industry for example: production shifted from Foshan and Dongguan to Shantou, and from Shantou to Quanzhou. Shantou and Quanzhou are cheaper than the Ho Chi Minh area!

This industry has several clusters because the equipment is cheap and the skills necessary for simple productions can be learned fast.

If I am allowed a broad sweeping generalization, here is how I see things:

Area Pearl River Delta Zhejiang, Jiangsu, Fujian Other areas, mostly inland
Maturity ++ +- —
Understanding of export customer requirements ++ +- —
Number of engineers + – —
Price level + +- –
Quality level + +- –

I often need to explain to my clients that, for many products, the Pearl River Delta is the best area for production thanks to the following attributes:

  • Wide range of component suppliers within 2 hours around the factory
  • Ability to source small batches (flexibility and speed)
  • Abundant skilled workforce
  • Access to excellent logistical infrastructure
  • Proximity to many potential customers (other manufacturers that buy parts)
  • Ease of attracting and retaining expats

Do you agree?

Filed Under: China Quality

Comments

  1. Fredrik Gronkvist says

    October 13, 2014 at 12:30 PM

    Very good article. However, I think the price difference is smaller than the quality difference. Too be honest I would never select a supplier in Henan or Liaoning, if the primary supplier area is in Guangdong or Zhejiang.

    • Renaud Anjoran says

      October 13, 2014 at 1:34 PM

      Yes, I am sure a lot of importers do this too.

  2. Callum says

    October 14, 2014 at 12:27 AM

    I agree entirely, Renaud. It’s all about finding the right cluster.

    In a way, there are not so many viable choices since a lot of industries are so concentrated. Inexperienced importers are not aware of how regional China is, and they don’t appreciate the cluster effect.

    • Renaud Anjoran says

      October 14, 2014 at 1:39 AM

      Thanks Callum. Yes, sometimes I ask “in which part of China is the factory located?” and the buyer can’t even respond. They check the pro forma invoice and say “I purchased FOB Shanghai”…

  3. Pat Cone says

    October 14, 2014 at 8:34 AM

    Have you noticed that most new factories are now being set up in the inland provinces or are factories still being opened in the usual cities? Have your past clients found any success when sourcing from these newer inland factories?

    • Renaud Anjoran says

      October 14, 2014 at 8:54 AM

      If we look at the numbers, I guess most new factories are still being set up in the coastal provinces.
      When it comes to very specific products (e.g. glass in Shaanxi province), it makes sense to source inland. But very few manufacturers in inland provinces are up to foreign buyers’ expectations when it comes to quality or shipping deadlines…


Weekly updates for professional importers on better understanding, controlling, and improving manufacturing & supply chain in China.

This is the official blog of Sofeast.com.

This blog is written by Renaud Anjoran, an ASQ Certified Quality Engineer who has been involved in chinese manufacturing since 2005.

Hit the button below to get in touch:

Contact Us!

Subscribe to our email newsletter

Connect with us

  • Email
  • Facebook
  • LinkedIn
  • RSS
  • Twitter
  • YouTube
sofeast
sofeast
sofeast

Latest Articles

  • Benefits of Product Design Optimization (Taguchi Method)
  • 9 Key Quality Management Challenges in China
  • Why the AQL Inspection System Is Still So Widespread
  • The Design for Reliability Process for Launching Reliable Products
  • Breaking news! China opens its borders to all foreign travellers!

Categories

  • Quality Control Tips
  • Sourcing New Suppliers
  • Supplier Management
  • New Product Development
  • Process Improvement
  • Ethical Sourcing

Archives

© 2023 QualityInspection.org